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PEER-REVIEWED ARTICLE Lignocellulose Manyuchi et al. (2015). “Techno-Economic Analysis,” Lignocellulose 4(1), 31-49. 31 Techno-Economic Analysis for Papermaking from Bagasse as a Value Addition Strategy Musaida M. Manyuchi, a,* Auxilliah. T. Chiwanga, b and D. J. Nkomo c The pulp and paper manufacturing industry Zimbabwe relies heavily on importing waste paper as its raw material from neighbouring countries such as South Africa. At the same time, the available local resource is wood, the continual cutting of which results in environmental problems. As a measure to add value and beneficiation of the sugarcane bagasse as well as to reduce deforestation, there is need to use alternative raw materials such as bagasse, which is readily available at sugar plantations for paper production. This study involved the processing of 40 tons per day of virgin paper from bagasse as an alternative option, using the kraft process with a conversion yield of 35%. Using this process, optimum operating pressure and temperature were found to be 9.6 atmospheres and 200 o C respectively, and a detailed process design was done considering the process safety issues. After doing an environmental impact assessment, the bagasse to virgin paper plant was recommended for siting in Chiredzi, Zimbabwe. An economic analysis carried out indicated a return on investment of 45% and a payback period of 2.2 years. The net present value was found to be $758,000 with the virgin paper selling price set at $108/ton. According to these assessments, the project is judged to be technically and economically feasible. Keywords: Bagasse; Kraft process; Virgin paper; Value addition; Techno-economic analysis Contact information: a: Department of Chemical and Process Systems Engineering, Harare Institute of Technology, P O Box BE 277, Belvedere, Harare, Zimbabwe; b: Department of Chemical and Process Systems Engineering, Harare Institute of Technology, P O Box BE 277, Belvedere, Harare, Zimbabwe; c: Department of Financial Engineering, Harare Institute of Technology, P O Box BE 277, Belvedere, Harare, Zimbabwe; *Corresponding author: [email protected] INTRODUCTION The pulp and paper industry in Zimbabwe relies heavily on importing waste paper as raw material. In addition, alternative sources from fresh wood are also being utilised. These practices pose both economic and environmental challenges to paper mills, as it is now costly to produce the paper, thereby increasing the product price on the market. At the same time, the sugar industry is generating huge amounts of bagasse as a waste product, which has potential to be used in paper production (Samariha and Khakifirooz 2011). The use of bagasse in the making of virgin paper is considered to be more environmentally friendly than using wood because of less harmful chemicals that are used in the production process (Gupta and Ahuja. 1989; Covey et al. 2006). Bagasse is the fibrous material that remains after crushing sugar cane and extracting the sugar. Bagasse fiber consists mainly of cellulose, lignin, and hemicellulose, is widely used for paper manufacture (Gupta and Ahuja 1989; Rainey and Clark 2004). Introducing bagasse-based virgin fiber as a components of the paper tends to reduce the dependence

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PEER-REVIEWED ARTICLE Lignocellulose

Manyuchi et al. (2015). “Techno-Economic Analysis,” Lignocellulose 4(1), 31-49. 31

Techno-Economic Analysis for Papermaking from Bagasse as a Value Addition Strategy

Musaida M. Manyuchi,a,*

Auxilliah. T. Chiwanga,b and D. J. Nkomo

c

The pulp and paper manufacturing industry Zimbabwe relies heavily on importing waste paper as its raw material from neighbouring countries such as South Africa. At the same time, the available local resource is wood, the continual cutting of which results in environmental problems. As a measure to add value and beneficiation of the sugarcane bagasse as well as to reduce deforestation, there is need to use alternative raw materials such as bagasse, which is readily available at sugar plantations for paper production. This study involved the processing of 40 tons per day of virgin paper from bagasse as an alternative option, using the kraft process with a conversion yield of 35%. Using this process, optimum operating pressure and temperature were found to be 9.6 atmospheres and 200

oC respectively, and a detailed process design

was done considering the process safety issues. After doing an environmental impact assessment, the bagasse to virgin paper plant was recommended for siting in Chiredzi, Zimbabwe. An economic analysis carried out indicated a return on investment of 45% and a payback period of 2.2 years. The net present value was found to be $758,000 with the virgin paper selling price set at $108/ton. According to these assessments, the project is judged to be technically and economically feasible.

Keywords: Bagasse; Kraft process; Virgin paper; Value addition; Techno-economic analysis

Contact information: a: Department of Chemical and Process Systems Engineering, Harare Institute of

Technology, P O Box BE 277, Belvedere, Harare, Zimbabwe; b: Department of Chemical and Process

Systems Engineering, Harare Institute of Technology, P O Box BE 277, Belvedere, Harare, Zimbabwe;

c: Department of Financial Engineering, Harare Institute of Technology, P O Box BE 277, Belvedere,

Harare, Zimbabwe; *Corresponding author: [email protected]

INTRODUCTION

The pulp and paper industry in Zimbabwe relies heavily on importing waste paper

as raw material. In addition, alternative sources from fresh wood are also being utilised.

These practices pose both economic and environmental challenges to paper mills, as it is

now costly to produce the paper, thereby increasing the product price on the market. At

the same time, the sugar industry is generating huge amounts of bagasse as a waste

product, which has potential to be used in paper production (Samariha and Khakifirooz

2011). The use of bagasse in the making of virgin paper is considered to be more

environmentally friendly than using wood because of less harmful chemicals that are

used in the production process (Gupta and Ahuja. 1989; Covey et al. 2006). Bagasse is

the fibrous material that remains after crushing sugar cane and extracting the sugar.

Bagasse fiber consists mainly of cellulose, lignin, and hemicellulose, is widely used for

paper manufacture (Gupta and Ahuja 1989; Rainey and Clark 2004). Introducing

bagasse-based virgin fiber as a components of the paper tends to reduce the dependence

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Manyuchi et al. (2015). “Techno-Economic Analysis,” Lignocellulose 4(1), 31-49. 32

on imported waste; also the cutting down of trees can be reduced, further decreasing

environmental impacts. The pulp paper processing is done in the following stages:

cooking, pulp washing, pulp screening, pulp cleaning, pulp thickening, and bleaching

(Lam et al. 2004; Poopak and Reza 2012). In Zimbabwe, the sugar industry is generating

0.427 million tons per year of bagasse as a waste by-product (Mtunzi et al. 2012). This

led to an innovative plant design capable of achieving 40 tons per day production of

virgin paper from bagasse. The product had involved a value-addition strategy with a

main focus on determining the economic viability of this technology (Nemati et al.

2011). The techno-economic assessment allowed the potential application of the process

at industrial scale.

EXPERIMENTAL

A sample of bagasse (Fig. 1) was obtained from Green Fuels Private Limited’s

Chisumbanje Plant, located in the Lowveld in Zimbabwe. This sample was analyzed at

the Harare Institute of Technology’s Chemical and Process Systems Engineering

laboratory utilizing the available resources. Feasibility of producing the non-virgin paper

from bagasse and determining its characteristics were done.

Fig. 1. Sample of bagasse used in non-virgin paper production in this study

Determination of Non-Virgin Paper Production Feasibility from Bagasse

The materials used included bagasse, NaOH, Na2S, a blender, a hot plate, a set of

sieves, an oven, a plastic dish, a sponge, nylon cloth, and water. To begin, 30 g of

bagasse was weighed on an electronic balance. Then 3 g of NaOH and 3 g of Na2S were

added to a large glass beaker containing 500 mL of water, and the resulting mixture was

stirred. The mixture was boiled for a minimum of two hours using a hot plate. After

cooking, the cooked pulp was placed in a blender to produce a fine pulp. The pulp was

poured onto a sieve and swished. This was done to evenly distribute the bagasse pulp.

The pulp was placed on a nylon cloth, and a sponge used to evenly press over the pulp so

as to draw as much moisture out of the pulp as possible. A rectangular wood block was

placed on top of the nylon cloth. The sieve was turned upside-down to remove the paper

from the sieve. The paper was left on the tray on top of the nylon cloth and left to dry

overnight at 70°C.

Determination of Residence Time for Non-Virgin Papermaking 100g of NaOH and 100 mL of Na2S were added respectively in 1 L of water.

Then 500 g of bagasse was weighed and placed in a beaker. The white liquor was added

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Manyuchi et al. (2015). “Techno-Economic Analysis,” Lignocellulose 4(1), 31-49. 33

to the bagasse sample and the mixture was boiled at 100 oC and atmospheric pressure.

The conductivity of the cooking pulp was tested at regular intervals and the readings

recorded.

Determination of Absorbency The capillary action test was employed as a measure of absorbency. The materials

used included samples of produced paper, water, acetone, hexane, methanol, ethyl ether,

beaker, and a clamp holder. The paper was cut into rectangular strips of equal dimensions

and each strip marked with an ink drop at the middle. The strips were dipped into various

solvents with the ink drops remaining above the surface of the solvent following the

paper chromatography procedure. The distance moved by the ink drop after a fixed time

of five minutes was noted, and the speeds of the various solvents in the paper were

calculated.

Determination of Virgin Paper Biodegradability An electronic balance, flash bottles, pieces of same paper sizes, micro bacteria,

water, and an oven were used. Five pieces of the paper were weighed using a balance to

note their initial masses. These specimen pieces were immersed in flash bottles

containing micro bacteria. These bacteria produced an alkaline solution that digests and

breaks down the cellulose in the paper. Samples were left in the flash bottles for five days

then harvested. The harvested samples were washed using water and dried overnight in

an oven and reduction in mass was noted as the measure for biodegradability.

Determination of the Effect of Various Pulping Chemicals on the Cooking Rate

Four samples of bagasse were subjected to different combinations of NaOH, Na2S

and Na2CO3 reagents to determine the effect of the chemicals on the rate of pulping. The

different combinations of chemicals were used and labelled as experiment 1, 2, 3 and 4.

Experiment 1 had both Na2CO3 and sulphide present with NaOH absent; Experiment 2

had both hydroxide and carbonate present with Na2S absent; Experiment 3 had both Na2S

and hydroxide present with Na2CO3 absent and Experiment 4 had all test reagents

present.

RESULTS AND DISCUSSION The bagasse was characterized for cellulose, lignin and ash content which are key in

paper production. The characterization of the bagasse used is given in Table 1.

Table 1. Bagasse Characterization

Component % Composition

Cellulose and hemicellulose 53.35 ± 0.8

Lignin 22.50 ± 1.9

Extractives soluble in alcohol-acetone 4.75 ± 4.6

Ash content 1.92 ± 3.8

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Feasibility Test of Kraft Process Using Bagasse A sheet of virgin paper from bagasse was produced with a conversion yield of

35% (Fig. 2). The experiment was also used to test the various effects of chemicals on the

pulping process to aid in reagent selection and to determine the yield of the process. The

yield of the process was between 35 and 40%, indicating that the pulping and washing

was done thoroughly.

Fig. 2. Raw non-virgin paper produced from sugar cane bagasse in the laboratory

Effects of Various Chemicals on the Pulping of Bagasse Four samples of bagasse were subjected to different combinations of reagents to

determine the effect of the chemicals on the rate of pulping. The different combinations

of chemicals were used and labelled as Experiments 1, 2, 3 and 4 (Table 2). In

Experiment 1, NaOH was absent to de-lignify the bagasse and so mechanical degradation

by the blender to produce pulp was very difficult. In Experiment 2, NaOH alone was

present, and a greyish mixture of unreacted bagasse and pulp was observed. In

Experiment 3, the bagasse took a long time to react, with periodic vigorous stirring. In

Experiment 4, the pulping was easier. The purpose of NaOH is to degrade lignin and that

of Na2S is to accelerate the cooking reactions and to decrease cellulose degradation

caused by NaOH. The greyish colour and lumpy pulp obtained in Experiment 2 is an

indication that the mixture was not cooked, and hence the pulping process was quite

difficult. An absence of any of the three reagents showed difficulty of pulping process.

All specified pulping chemicals: NaOH, Na2S, and Na2CO3, must be added during the

cooking process in order to obtain a good pulp. Any compromise in the quantities used

will also result in a compromised quality of the pulp produced.

Table 2. Effect of Various Chemicals on the Pulping of Bagasse Paper

Experiment NaOH Na2S Na2CO3 Result

1 Absent Present Present The bagasse could not be mechanically pulped

by the blender

2 Present Absent Present A greyish mixture of unreacted bagasse and

pulp was obtained

3 Present Present Absent The bagasse took a long time to react with

vigorous stirring periodically

4 Present Present Present The bagasse was chemically weakened and

easily mechanically blended

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Biodegradability Test The results of this method permit an estimation of the degree of 0.44% on the

biodegradability and over which the paper 227.3 days will remain in an aerobic

environment. This is done by measuring reduction in mass as a function of time that the

paper is exposed to micro bacteria (Table 3). The paper is estimated to be fully degraded

after 7.6 months. The results showed that the paper is biodegradable thus production of

virgin paper from bagasse is a green solution to environmental and pollution

management.

Table 3. Biodegradability Results on Virgin Paper from Bagasse

Sample (g) (g) Difference in

mass,

BD (%)

1 3.78 3.74 0.04 0.010 1.10

2 3.65 3.61 0.04 0.010 1.10

3 3.74 3.68 0.06 0.016 1.60

4 3.60 3.52 0.08 0.022 2.20

5 3.56 3.50 0.06 0.017 1.70

Capillary Action Test

This a test used to measure the absorbency of the paper. Distance moved by the

ink drop in the specified time was used to calculate the speeds of the various solvents in

the paper. The other solvents were used to compare with water (Fig. 3). The resulted

show that acetone had the highest rate of capillary action, followed by methanol, water,

hexane, and ethyl ether. This indicated that virgin paper made from bagasse has good

absorbency and can be used for toiletry purposes.

Fig. 3. Capillary action results indicating paper absorbency

Determination of Residence Time in Pulper through the Electrical Conductivity

The electrical conductivity of the pulp at any given time is used as a measure to

show the amount of unreacted NaOH in the pulp. The pulping process was complete

when the conductivity of the pulp is 2 S/cm at a residence time of 120 minutes (Fig. 4).

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Fig. 4. Residence time of pulping

PROCESS DESIGN DESCRIPTION

The pulp paper process makes use of the kraft pulping technique (Gupta and

Ahuja 1989; Rainey and Clark 2004), as diagramed in Fig. 5.

Fig. 5. Process flow diagram for virgin paper processing plant from bagasse

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Before kraft pulping, the bagasse is passed over a vibrating screen to remove

particles such as stones, which might cause damage to equipment if present as well as

compromise the quality of the pulp. The bagasse is then cooked in a solution known as

white liquor containing water, NaOH, and Na2S at a pressure of 9.6 atm and 200oC in a

large vat known as a pulper (Gupta and Ahuja 1989; Rainey and Clark 2004). The

resulting slurry known as pulp is pumped to the blow tank where it is defragmented by a

sudden drop of pressure in the blow tank. The slurry is pumped to the storage tank.

Screeners and washers then wash the pulp removing chemicals (contained in the black

liquor) and other debris such as pith. The washed pulp is then bleached in bleaching

towers using chlorine dioxide to give a white cleaner colour. The pulp is refined and is

formed into a paper web by the headbox. The wet paper web is pressed by the press

machine as preparation for drying by reducing the water content of the virgin paper to

make the required product (Fig. 5). The virgin paper produced from bagasse can be

further processed to newsprint, printing paper, tissues, or kraft paper, depending on the

requirements of the customer. Process control and hazard operability analysis were done

to ensure efficiency and safe operation of the plant by monitoring key variables such as

flows, temperature, level, composition, and moisture content (Fig. 5).

Considering that an amount of wet bagasse recovered annually is 0.427 million

tons per year with a yield of 35% and a plant utilisation of 80%, an overall mass balance

per day indicated in Fig. 6 was carried out.

Bagasse 136.6 tons

Virgin paper 42 tons

Debris 94.6 tons

Fig. 6. Mass balance summary per day

An overall heat balance was carried out, considering that the energy required is

equal to the heat into the process less the heat out. This analysis considered the batch

pulper and the conveyer, as indicated in Table 4.

Table 4. Energy Balance Summary

Item Heat in (MJ/ batch) Heat Out (MJ/ batch)

Continuously stirred batch pulper 19 441 2700

Conveyor dryer 16 485 1 833

EQUIPMENT DESIGN

Equipment design of the continuously stirred batch pulper and conveyor dryer

was carried out. Mass and energy balances assisted in the design of these two pieces of

equipment as well as the sizing and specification of other equipment.

PROCESS

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Stirred Batch Pulper Design The main function of the stirred batch pulper (SBP) (Fig. 7) is to convert bagasse

into pulp by breaking down lignin in bagasse fibers through cooking, thereby softening it

for paper sheet formation. Bagasse is fed into the pulper by use of a screw conveyor and

white liquor as well as water is pumped into the SBP. An agitator is used to keep contents

well mixed for thorough cooking.Important parameters governing the SBP design are

given in Table 5.

Table 5. Stirred Batch Pulper Design Specifications

CHEMICAL ENGINEERING DESIGN

Number required 4

Height 4.34 m

Nominal diameter 2.17 m

Volume 16 m3

Nominal pulper thickness 0.022 m

Number of heating coils 8.4

Design pressure 1 167 kPa

Jacket thickness 0.30 m

Material of construction Carbon steel

MECHANICAL ENGINEERING DESIGN

Weight of contents 1 876 kN

Maximum bending moment 21.3 kNm

Maximum compressive stress 1.931 kN

Wind load 1.572 kN

Fig. 7. Stirred batch pulper with cross section showing position of agitator drawn in Autocad 3

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Conveyor Dryer Design The conveyor dryer, also known as the continuous through-circulation dryer,

operates on the principle of blowing hot air through a permeable bed of wet material

passing continuously through the dryer (Fig. 8). Dryer rates are high because of the large

area of contact and short distance of travel for the internal moisture. Conveying-screen

dryers are fabricated with conveyor widths from 0.3 to 4.4 m sections. The important

parameters that were calculated are the volume, area, slicing width, height, length,

conveyor speed of belt, power required by blower, and heater-fan. An assumption of

taking the maximum value of the dryer capacity was made in the design of the conveyor

dryer. Important parameters governing the conveyor dryer design are given in Table 6.

Table 6. Conveyor Dryer Design Specifications

CHEMICAL ENGINEERING DESIGN

Number required 1

Function Drying of wet paper web into virgin paper

Operation Continuous

Number of heater-fans 3

Area 18.14 m2

Length 4.77 m

Slicing width 3.8 m

Height 3.8 m

Volume of dryer 69 m3

Operating temperature 205oC

Operating pressure 1 atmosphere

MECHANICAL ENGINEERING DESIGN

Feed weight on belt 6.2 N

Maximum tensile stress on belt 137 N

Creep strength 581 kN

Fig. 8. Conveyor dryer (a) South east view, (b) Section view drawn in AutoCad 3

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Sizing Major Equipment

Equipment in the process was sized according to the plant capacity, efficiency and

varying flow rates between equipment within the process. The major parameters are

given in Table 7.

Table 7. Specifications for Sized Equipment

BLOW TANK

Volume 3.54 m3

Diameter 1.44 m

Height 2.16 m

Material of construction Carbon steel

BLEACHING TOWER

Volume 3.5 m3

Diameter 1.14 m

Height 2.16 m

Material of construction Stainless steel

STORAGE TANK

Volume 11.4 m3

Diameter 2.58 m

Height 3.87 m

Material of construction Stainless steel

ENVIRONMENTAL IMPACT ASSESSMENT

The pulp and paper industry is governed by the following environmental

legislations and laws; Environmental Management Act Chapter 20:27, Atmospheric

Pollution Prevention Act Chapter 20:03, Zimbabwe National Water Authority Act

Chapter 20:25, Hazardous Substances and Articles Act Chapter 15:05, Forestry Act

Chapter 19:05, Water Act Chapter 20:22, Pneumoconiosis Act Chapter 15:08 and

Factories and Works Act Chapter 14:08.

According to the environmental impact assessment (EIA), the potential impacts

and their mitigation are indicated in Table 8.

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Table 8. Summarized Impacts and Mitigation Measures for the Bagasse to Paper Plant

Stage Negative impacts Positive impacts Mitigation measures

Construction Noise and vibrations Dampening instruments and ear protectors e.g. ear muffs to minimize vibration

Destruction of natural ecosystem

Construction of access roads and service facilities

Vegetation replacement

Land pollution Erection of waste disposal bins on site and frequent litter picking

Air pollution Pre-treatment of effluent gases

Operation Water pollution Air pollution

Continual development of the area

Minimize harmful emissions into water and air by thorough pre-treatment of effluent

Decommissioning

Inability to rehabilitate land Ghost sites creation Unemployment

Facilities can be used for other purposes such as training facility for locals

Train staff entrepreneurial skills

SITE SELECTION AND PLANT LAYOUT Site Selection

Three possible sites were targeted and these were Harare, Mutare, and Chiredzi.

The Chiredzi was chosen due to the following considerations indicated in Table 9.

Table 9. Description of Chiredzi Site Factor Description

Plant location Near outskirts of sugar plantations

Availability of water

Municipal water, dams and/or boreholes, Save, Runde and Mkwasine river.

Population density Semi-populated

Political stability Stable

Availability of land Plenty. The land is generally flat, well drained and has suitable load-bearing characteristics.

Local community considerations

Provision of hospitals, post offices, schools, police stations and other necessary facilities from which plant personnel can benefit.

Labor availability Unskilled labour available

Market Marketing area mainly Harare and Mutare.

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Plant Layout The principal factors that were considered in the optimum design of the plant

layout were the process requirements, convenience of operation, economic considerations

(construction and operation costs), and safety of workers and visitors to the site. The

plant layout is shown in Fig. 9.

Fig. 9. Plant layout for bagasse virgin paper processing plant

ECONOMIC ANALYSIS

An economic analysis was carried out to assess the profitability of conversion of

bagasse to paper in order to determine its commercial success. A commercially

successful project is one that earns more or surpasses by a reasonable margin the capital

costs incurred in establishing the project.

Capital Cost Calculation Capital cost estimates for chemical process plants are often based on an estimate

of the purchase cost of the major equipment items required for the process, the other costs

being estimated as factors of the equipment cost (Sinnot 2006).

Purchased equipment cost

This factor represents a significant part of the investment cost, and these are given

in Table 10.

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Table 10. Purchased Equipment Cost

Equipment Number of pieces Unit cost ($) Total cost ($)

Vibratory screens 1 6 000 6 000

Blow tank 1 11 000 11 000

Pulper 4 10 000 40 000

Blow tank 1 12 000 12 000

Bleaching tank 1 17 100 17 100

Rollers 10 1 000 10 000

Presses 3 1 400 4 200

Paper making machine 1 25 000 25 000

Conveyor dryer 1 26 000 26 000

TOTAL 151 300

Direct costs

These are added to indirect costs to determine the fixed capital investment. Table

11 summarises the direct costs.

Table 11. Direct Costs

Component Range % Selected Amount $

Raw materials (10~50) of production

cost 20 46 237.28

Operating labour (10~20) of production

cost 15 34 677.96

Utilities (10~20) of production

cost 15 34 677.96

Maintenance and repairs (2~10) of fixed capital 5 11 559.32

Operating supplies (10~20) of maintenance 15 1 733.90

Lab charges 15 of labour 15 5 201.70

Patents and royalties (0~6) production cost 5 11 559.32

TOTAL 145 647.44

Indirect costs

These are estimated on the basis of equipment cost (E). Percentages are obtained

from Timmerhaus (1991). A summary of the indirect costs are given in Table 12.

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Table 12. Indirect Costs Item Chosen % Cost $

Engineering and Supervision 33 of E 49 929

Contingency 42 of E 63 546

Construction expenses 41 of E 62 033

Contractor’s fee 21 of E 31 773

TOTAL 207 281

Fixed capital investment

Manufacturing fixed-capital investment represents the capital necessary for the

installed process equipment with all auxiliaries that are needed for complete process

operation.

FCI = $(207 281 + 145 647.44)

= $352 928. 44

$353 000

Working capital investment, WCI = 20% of FCI

= 0.2 x $353 000

= $70 600

Total Capital Investment, TCI = FCI + WCI

= $(353 000 + 70 600)

= $ 423 600

Total production cost

This is the sum of the total manufacturing cost and total general expenses. Fixed

costs are shown in Table 13.

Table 13. Fixed Costs Component Range % Selected Amount $

Fixed charges (10~20) of FCI 11 38 830

Depreciation on machinery 10 of FCI 10 35 300

Depreciation on buildings (2~3) of FCI 2 7 060

Local taxes (1~4) of FCI 3 10 590

Insurance (0,4~1) of FCI 1 3 530

TOTAL 95 310

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Manyuchi et al. (2015). “Techno-Economic Analysis,” Lignocellulose 4(1), 31-49. 45

The cost of plant utilities is given in Table 14.

Table 14. Power and Utilities Cost

Utility Units / year Cost / unit ($) Total annual cost ($)

Steam 2 364.70 6.97 16 481.92

Electricity 395 566 kWh 0.15 / kWh 59 335

Water 260 000 m3 2 / m

3 520 000

TOTAL 595 816

Maintenance and repair costs = 10% of FCI

= 0.1 x $353 000

= $35 300

Direct production cost = $(595 816 + 35 300 + 95 310)

= $726 426

Plant overhead cost = 10% of raw material cost

= 0.1 x $46 237.28

= $4 624

Total manufacturing cost, MC = Plant overheads + Production cost

= $4 624 + $ 726 426

= $731 050

General expenses for the plant are shown in Table 15.

Table 15. General Expenses

Item Range % Chosen % Cost $

Administrative costs 2-6 of MC 2 14 621

Distribution and selling costs 12-20 of MC 12 87 726

Research and Development 5-7 of MC 5 36 553

Financing (interest) 0-10 of FCI 10 35 300

TOTAL 174 199

Total Production Cost, TPC =Manufacturing cost + General expenses

=$(731 050 + 174 199)

=$905 249

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Profitability Analysis

Production capacity per year = 42TPD x 260 days

= 10 920 tons

Production cost per unit =

=

= $82.89 / ton

= $83 / ton

Adding a 30% mark up:

Selling price for virgin paper = x $83/ton

= $108

Total revenue =10 920 ton/ year $108 /ton

=$1 179 360

Gross profit = Total revenue – Total production cost

= $1 179 360 - $905 249

= $274 111

Tax paid = 0.3 x Gross profit

= 0.3 x $274 111

= $82 233

Net profit = Gross profit – Tax paid

= $274 111 - $82 233

= $191 878

Return on investment and payback period

ROI = x 100%

= 45 %

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PB = x 1 yr

= 2.2 years

Net Present Value A plant lifespan of 10 years was assumed considering the technological

advancement and the net present value is indicated in Table 16.

Table 16. Net Present Value Determination

Year Net Cash Flow ($) Discounting factor Present value ($)

0 -423,600.00 1 -423,600

1 191,878 0.909 174,417

2 191,878 0.826 158,491

3 191,878 0.751 144,100

4 191,878 0.683 131,053

5 191,878 0.641 122,994

6 191,878 0.564 108,219

7 191,878 0.513 98,433

8 191,878 0.466 89,415

9 191,878 0.424 81,356

10 191,878 0.38 72,914

Total

1,181,393

Net present value

757,792.85

Fig. 10. Break even chart

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Break Even Analysis

Number of units needed to break-even point = x 10 920 tons

= 3 276 tons

Break even in monetary terms = 3 276 tons x $108 / ton

= $353 808

The break even chart is shown in Fig. 10.

CONCLUSIONS

1. Production of virgin paper from bagasse is technically and economically feasible

using the kraft pulping process with a pulping yield of 35%.

2. An environmental impact assessment demonstrated that very minimal

environmental damage will be caused by the establishment of the proposed

bagasse-to-virgin paper processing plant.

3. A financial analysis of the project indicated the economic viability of this

technology with a payback period of 3.33 years and a return on investment of

30%, with the virgin paper selling at $108.00/ton.

REFERENCES CITED Convey, G., Rainey, T., and Shore, D. (2006). “A new opportunity to pulp bagasse in

Australia?,” D. Horgath (ed.), Proceedings of the Australia Society of Sugar Cane

Technologists, Australia, Queensland, Mackay.

Gupta, T., and Ahuja, V. (1989). “Bagasse based paper and newsprint in India: Economic

and policy issues,” Vikalpa 14(3), 47-53.

Lam, H. Q., Bigot, Y. L., Delmas, L. and Avigon, G. (2004). “Production of paper grade

pulp from bagasse by a novel pulping process,” Appita Journal 57(1), 26-29.

Mutunzi, B., Mampwheli, N., and Meyer, E. (2011). “Bagasse based co-generation at

Hippo Valley Eastates sugar factory in Zimbabwe,” J Energy in Southern Africa 23

(1), 15-22.

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paper from bagasse in Khuzestan Province,” J. Appl. Environ. Bio Sci. 1(11), 487-

491.

Poopak, A. and Reza, A. R. (2012). “Environmental benefits of using bagasse in paper

production. A Case Study of LCA in Iran,” Global Warming-Impacts and Future

Perspective, Chapter 8. InTech, Open Science Open Minds, 205-222.

Rainey, T. K., and Clark, N. B. (2004). “An overview of bagasse as a resource for the

Australian paper industry,” Proceedings of Australian Society of Sugar Cane

Technology 26.

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PEER-REVIEWED ARTICLE Lignocellulose

Manyuchi et al. (2015). “Techno-Economic Analysis,” Lignocellulose 4(1), 31-49. 49

Samariha, A., and Khakifirooz, A. (2011). “Application of NSSC pulping to sugarcane,”

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Sinnot, R. K. (2006). Chemical Engineering Design, Coulson and Richardson’s Chemical

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Edition, Oxford: Butterworth- Heinemann.

Timmerhaus, K. D. (1991), Plant Design and Economics For Chemical Engineers, 4th

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Article Submitted: March 10, 2015; Peer review completed: May 25, 2015; Revised

version received and accepted: June 2, 2015; Published: June 15, 2015.